OFF-TOPIC Cashflow 101 - Game strategies

[andviv]

Many here are familiar with the Cashflow 101 game

I wanted to start this thread to see how those of you Fastlaners use the game.

I posted some of the strategies in other post

Any strategy that you want to mention?

 

[SteveO]

I like to go straight to the big deals. Take out major loans and keep buying.

 

[Russ H]

Cashflow is one of my FAVORITE subjects.

Prepare to get buried by my posts . . .

Apologies in advance-- I considered making this a separate thread, but figured having all of this in one place makes more sense.

Here we go:

Playing Cashflow: San Francisco Rules

Remember-- each turn for a player in cashflow 101 is the equivalent of 1- 3 MONTHS in the real world. So if you've already made 30 moves, that's the equivalent of 3-8 YEARS in real life.

Here's how we play:

If you know that certain cards are going to come up (and you're waiting for them), it makes the game too predictable (and not real life). We do the following:

1. At the beginning of the game, shuffle all of the cards, and remove 3 from each (big deal, small deal, and Market). Doodads you can leave in (we so,metimes add a few more, just to make it interesting, but you can always tell since they look different).

2. Make all $1 Stock cards = ZERO (i.e., bankrupt). That way, if you bought 100 million at $5 a share, and somebody pulls the $1 card after this, <POOF!> there goes all of your stock!

3. Allow partnering on deals (as in real life). So in a game with 6 players, if I go last, I can still bargain with other players, buy their deals (or partner in with them), and borrow money from the bank (as in real life). RESULT: You can get out of the ratrace with ZERO moves (i.e., before it's your turn).

Since we can sometimes get rich fast using this method, we also decide to stay in the game longer, and become an angel investor for other players. The goal here is not to buy them out of the rat race, but to teach them the value of leverage and partnering.

I once played a cashflow game at one of Les Gee's REST workshops where 3 of us got out of the ratrace in 5 TOTAL turns (not five for everyone-- 5 moves only). Total time to play the game: About 10 minutes.

Good stuff.

Some may say this is too easy.

I say: Sure. You do it. Play cashflow 10 times. If you can get out of the ratrace every time in less than 10 moves (total, not per person), then it's time to start making the rules harder (changing the market conditions, etc.).

Try it with the above additions (pulling 3 cards, making the $1 stock card a BK), and see what happens.

I guarantee you it will be an interesting game.

 

[Russ H]

Ways to make the game fit real life:

-As mentioned earlier, do not remove the $1 stock card-- make it equal ZERO, and anyone holding any shares loses all value (they write the stock out of their books, and no longer have stocks in this co.) So when a $5 or $40 card comes afterwards, the previous owners have NO SHARES to sell (since they became worthless when the $1 card was drawn). As was mentioned, anyone who buys stock *after* the $1 card is drawn has less to worry about . . . unless . .

-Each deck is reshuffled after every turn. That way, no one can "count the cards".

-When each game begins, 10 cards are removed from each deck, and set aside. This way, you can't count on a specific deal coming up-- you have to make the most of each and every card (just like in real life).

-We have never added cards, but this is a cool idea. It would be hard to make them look identical, though!

-Change all cards (this is a lot of work) making them more fit your local market. So if the houses are more, you make them more. This is not as good an idea as it sounds, since you would need to change all of the income/profession cards as well. We don't do this.

-Play with your own income/debts-- this is fun, but again, we often need to "cut" each of the items (income, expenses, etc) by 50% or more if we want to make our "real life" numbers fit with the SUPER LOW prices of RE in the game! (remember, we live in CA, and the game was developed before the last "bump up" in RE prices).

-Play as couples (two people making decisions as one player throughout the game). Not for the feint of heart--- a great way to learn how to work together as a couple, but NOT EASY! (if your marriage or relationship is a bit rocky when it comes to agreeing on finances, I don't recommend this approach, since you will wind up fighting in front of other players). A better way is to play separately, and discuss your individual games afterwards to learn from each other. And the key is-- once you feel like you know your parnter's playing style, "switch" roles, playing a game *their* way-- to see if you really understand what they would do (hint: you won't, but playing as "them" will be a big learning experience).

-Les Gee's partnering ideas are phenomenal. And the results are so compelling that Les himself changed his real life investing strategies based on what he saw/learned when he played the game. Anyone who has a chance to take REST is encouraged to do so-- it will open your eyes!

-Make downsizing a roll of the dice: When you get downsized, roll the dice to determine how many turns you will be out of the game (just roll one die). Downsized players are still allowed to borrow money from the bank and negotiate deals from other players who pull deal cards-- in fact, I can often get out of the rat race *while* I'm downsized-- just like in real life!

-Russ H.

 

[Russ H]

Why I Play Cashflow

The whole idea of cashflow is to teach us about how money works-- in financial statements, passive income, the difference between assets and liabilities, the value of ROI, OPM, and just what paying off your debt does to you, esp from a time standpoint (I now only pay off my debt as the last move before I leave the rat race, and then only if it helps-- otherwise, I use the $$$ to swing big deals with good cashflow or potential flips with great appreciation).

Part of the fun of cashflow is playing fast and loose, and trying new things to see if they work. The first time I tried massive leveraging (buying every big deal in sight), it was a scary experience. I was going into debt big time. The hilarious thing was, I was in debt more in the REALworld loans, yet I was petrified doing it so fast in the game! So the more I looked at what was working in cashflow (and thinking it was crazy), the more I realized that I could use some of the techniques in the real world, esp if I could replicate a positive outcome in the game on a consistent basis.

quote:

IMHO, I think that coming up with creative ways to get out of the RR quickly is not the point of the game

Time is relative (lunch time doubly so, says Douglas Adams). Getting out of the game in a short period of time does have a bearing on how you will fare in real life. I have played with very conservative cashflowers, who had to build up enough $$ before they would take a "risk" on buying an asset in an upwardly trending market. I takes these folks *hours* to get out of the rat race-- and it will take them *decades* in real life. If you can play cashflow, lots of different times-- not buying any of the $1 stock card-- and still get out consistently within an hour, I think this is saying something. I know some folks disagree with me on this- -but it wasn't until I started doing this (getting out of the RR within an hour, consistently), that I started to see how I would apply these brand-new things I was learning into my real life investment strategy.

It's easy to shoot holes into the logic of the game-- saying it's an unrealisitc market, or that these deals never come along in real life. Prior to playing cashflow, I would have agreed. But once I started playing, I started looking-- harder-- for the kinds of deals RK was hinting at. I did find some, and I took advantage of them.

For me, playing cashflow is all about learning new things and being able to try out new strategies and creative partnering (or just helping others) to first generate lots of capital (usually via flips), then using the massive $$$ to buy good investments that yield positive passive income.

Some have accused me of bragging about my abilities to get out of the game. That was never my intent, and I'm really sorry if it came off that way. I guess I'm just so stoked about learning-- and using-- these new tools, that I want to share them with others. But I don't want to just give a blow-by-blow description of the game, since each and every game is so different. I play differently and do different things each time I play. But the end result is pretty much the same: Out of the rat race, and in fairly short order.

So for me, time is important. But it's just part of the game-- learning how to roll with different circumstances, opportunities (or lack of), and other players-- these are the reasons I play (and have learned so much from) cashflow.

-Russ H.

 

[Russ H]

Is Cashflow too Easy?

Playing cashflow is like playing the game "go"-- minutes to learn, a lifetime to master.

I can get out of the rat race in less than one full circuit (typically 4-6 turns, more or less) playing the teacher, WITH NO INCOME. That means that whenever I pass "paycheck", I have expenses, but no income (except for passive income). I can get out consistently in less than 10 turns.

Cashflow is all about learning, and then raising the bar, and learning some more.

It's also about trying strategies out in the game that you might want to use in real life. Trying them for 10 games (with a variety of other players, and SF rules) often tells you if your real life strategy has a chance of working. But it's not a guarantee!

-Russ H.

 

[Russ H]

Since the manual says that you can't partner, are you just modifying the rules?

Can you give example of how you 'help' others and protect yourself?

I have an older manual, but to my knowledge, the only thing it says is "Players may not team up with other players to buy investments."

So . . . that means that two people can't buy a 3/2 house. Only one can own it. But what else could you do? Offer someone $5K cash to buy the deal they just picked up? (this gives you an investment, and gives the other player needed cash to buy a big deal). Could you give them cash in exchange for them giving you first right of refusal when they pick up their next three market cards? (yep). And this is just a start; what about giving (selling) them one of your other investments, so you can buy one they just picked up? Or how about you buy the asset, but give them 50% of the cashflow? (technically, this is not teaming up, since you still own 100% of the asset and can do with it as you please. But in the meantime, the other player gets cashflow!)

These are just a few examples-- the key is to find things that the other players *want*, and offer it to them in exchange for them giving you something that *you* want (kinda like real life, eh?).

As far as helping others when you are in the fast track, who says you can't give people advice, or discuss investment strategies with them? Will this win you the game? No, probably not. But you will learn more about the people you are playing with, and they will be more likely to partner with you on deals in the future (either playing cashflow, or in the real world). Through this process, you get to "know" a person through how they play (and how they work, or don't work, with you).

You have mentioned many times in posts that you like to start with no pay but still with all expenses.
Do you mean no monthly cashflow? Is that because you take out a loan right away so that raises your expenses?

Yes, I mean no monthly cashflow. You have to survive by borrowing (taking out loans). So each time you land (or pass) paycheck, you must deduct all of your expenses, but you get no income! (kinda like being downsized but still having to make mortgage payments and feed your family).

Is this real? Absolutely-- millions of Americans had to do this when the dotcom bubble burst. Is it easy? Heck no! It's easy to go bankrupt-- unless you know what you're doing and work fast (via investments) to get cash quickly.

So ask yourself: If I had to get $100K CASH as quickly as possible (playing within the rules), how would I do it? Once you figure this out, debt no longer is as scary-- it becomes a way to make your life *easier*, not harder. You just need to know how to use it!

BTW, having no money come in and borrowing to stay alive was the opposite of how I lived my real life before playing this game-- every fiber of my being screamed "No!" when I tried this. But to my shock, I figured out how to make it work. The key is-- it's not simple. You need to keep in constant motion, and be on top of your money picture at every moment. It's like cranking up your normal gameplay 3 notches (very intense).

After you've done it a few times, though, it gets easier. The stress and hyper-activity decreases big time. Why? Because you know it works, and you know how to make it work. But the first few times you play this way, it will freak you out!

Try it-- and don't be upset if you lose. Keep playing (and borrowing) until you figure out how things work. Once you get there, and can get out of the rat race consistently in less than one full revolution around the board, you're ready to start more advanced techniques (like partnering, mentioned above).

-Russ H.

 

[Russ H]

Does it take you 2-3 hrs to Play the Game?

(Remember: 1 hr in cashflow = ~10 yrs in real life)

I've played with a few people who play cashflow the same way, over and over, and never change their strategy. By the time everyone else is out of the rat race, they're still working on buying their second or third property.

They wait the entire game to be lucky enough to pick up the $1 stock, or they'll only buy the house that requires next to nothing down and has HUGE positive cashflow (I think there are one or two in the entire deck). They won't buy anything else unless they have enough cash, and even then, will often pass up a great deal. Sometimes they won't even sell it to others!

They never make it to big deals, because after 2-3 hours, they are the last one left and everyone else is tired. By then they have 3 kids and have been downsized at least 2 or 3 times.

My point? If you play the game to win (or at least to better your own previous personal best), you are driven to get out faster. If you just play the same way, over and over, and never get out, what have you learned?

Answer: You've learned playing cashflow that way doesn't work! :bgh:

-Russ H.

 

[Russ H]

Why get out Faster?

Finishing the game in under an hour has a direct relationship on my real-life strategy.

Cashflow is different from real life, but many things you learn while playing can be applied to your real life plan. Things like leverage and OPM, the importance of networking and working with others, and the ability to structure a "win-win" deal are all tools that can be transferred into the real world.

Playing the game is an analogue of real life, except it goes much faster. For instance, you pass a payday every few minutes, where in real life this only happens about 25 times in a year. If you play the game conservatively and make smart investments, most everyone can get out of the rat race in 90-120 minutes. Let's say that's equivalent to working 20-30 years in the real world before being able to retire.

So what does it mean when you can get out in 45 minutes? The implication is that your financial strategy is working faster, and that you will be able to generate passive income at a greater rate and in less time than other players. Applied to your real world strategies, this might mean that you get out of the rat race in 10-15 years, not 20-30.

The really amazing part is that folks who truly live what they learn get out of the rat race even faster. But it takes drive, work, and sacrifice, and the ability to learn quickly from your experiences. And like in the game, when you fail you need to pick yourself up, dust off, and keep running. Experiencing and then overcoming failure is a key component to success.

RK never said that getting financially free was easy, or that someone could do it overnight. Getting out of the rat race takes lots of hard effort, and the ability to make good choices and investment decisions. Playing cashflow is a great way to develop those skills, and try out new strategies.

-Russ H.

 

[Russ H]

Why Play Cashflow?

Cashflow is like life-- what you get out of it depends on what you put into it.

Can you play CF101 and get out-- every time-- within 45-60 minutes?

You need 4-5 players to do this, but it's not easy unless you truly understand RK's principles.

Most decent experienced players can get out fairly consistently in 1-1.5 hrs-- I'm saying you can do it in almost HALF this time, ALL the time. And that you can still do it if you are downsized and have kids (although I often do it so quickly that I never even pass the downsize square!).

That's the secret-- playing the game at a level most never even dream of (exactly what you are doing in real life). Only by playing CF, you can take risks and learn strategies without spending a lot of $$$. Once you get something that works, consistently, you can up the ante:

- take only half as many turns as everybody else, and still do it in 45 minutes.

-then, do it with ZERO income (no income, just expenses), and get out in 45 minutes.

Once you get to that point, get out with 2x expenses in less than 60 minutes.

I'm not talking about "lucky rolls"-- I'm talking about learning and implementing a consistent strategy that gets you out of the rat race FAST--EVERY TIME-- in a variety of situations, with a variety of players.

The keys are leverage and working deals with other players-- exactly what it takes in real life to do things fast.

-Russ H.

 

[Russ H]

A Challenge to Experienced Cashflow Players:

Imagine this:

Play the game with 6 people (not family members)

You are the teacher with NO INCOME (i.e., every payday, you have expenses, but no income from job)

Only take half as many turns as other players in the game (you move once for every two turns from others).

Using the above scenario, I can get out of the rat race in less than 45 minutes.

Consistently.

Still think the game is too easy, or relies on luck?

Figure out how to do the above, and do it consistently.

Then look around and tell us, honestly, that what you've just learned hasn't changed your life.

Think you can do it? :smxB:

-Russ H.

 

[Russ H]

Offer to "Buy" Another Player's Children?

Anyone who has played CF 101 a few times has come to the realization that the added expense of children can slow or even reverse your ability to leave the rat race.

If one player has little or no money or cashflow, and has multiple children, they can take advantage of very few opportunities. So when they land on "Opportunity", unless it's one of those rare positive cashflow deals with little or no down, they will often feel that they can't take advantage of it and will turn the card down.

Here's a thought (something that happens in real life): If a player has access to opportunities, but cannot take advantage of them because of their large expenses, offer to *sponsor* (not actually 'buy') one of their kids for the rest of the game in exchange for first right of refusal on the next three times they land on the "opportunity" square (and have them choose a "Big Deal" card).

This is a win-win: The player with lots of kids now has more cashflow, and a benefactor for their kid(s), and the richer player now has more opportunities (and the ability to do something really great with their excess cash). And if you don't want the big deal, they can auction it off to another player (often making much more money than if they had pulled a good "small deal"). Robert Kiyosaki talks about learning to negotiate and come up with a deal where both sides benefit. This approach certainly seems to be a win-win.

Any comments?

My greatest delight in playing cashflow is what I learn about myself and others as I play the game. It's a great way to build insight.

-Russ H.

 

[Sid23]

Ridiculous amounts of knowledge here folks. Rep speed ++

EDIT: Russ, apparently I need to spread more rep speed around first.

 

[Russ H]

Real Life?

In real life, I pay off my credit cards every month. I consider them "bad debt". I do not have any car loans (I own 7 cars, all paid off). So I certainly practice the "paying off your debts" approach.

But I also have several houses, used for a variety of things (one as a business rental, two for a developing business, and one to live in). That's better debt, because I'm using the leverage (OPM-- other people's money) to get ahead faster, through appreciation and all of the wonderful tax advantages of RE ownership.

I used to play the cashflow game as I live my life-- take it slow and easy, look for the really good deals, start with small deals (sure things like $1 stocks) and build them into cash for bigger deals.

But when I played in the San Francisco CF game, I found that some of the guys used massive leverage and borrowed like crazy. They were often out of the rat race in less than 45 minutes-- something I had thought was nearly impossible.

So the next time I played, I tried it. I borrowed from the bank at 120% interest, and bought everything I could find. This is not a real world strategy for most, since most banks won't lend you unlimited funds. But it opened up a new reality for me--one where *I* am not the qualifying reason for a loan-- rather, the *business* (or rental) is the main qualifier. That IS real world-- and it opened my eyes to the possibilities.

The next time I played cashflow I did it as an unemployed teacher (i.e., a teacher with all of the expenses, but no income). The only way I could survive was by borrowing massively, since when I'd hit payday, I would have expenses but no income.

I got out of the rat race in less than an hour.

This was an epiphany to me. No, I didn't go out and borrow millions of dollars*. But I did start looking at money differently. I started to see it as leverage, and I was no longer as afraid of the big numbers, since I had an investment strategy (and through borrowing and planning ahead, it was almost impossible to go bankrupt).

As a result, I now look at things in my own life a bit differently. No, I'm not getting loans at 120% interest, but I'm also not as afraid to look at deals that are over $1,000,000.00-- which was hard for me before.

My point? That by playing cashflow, I learned how to look at the world of money differently. Doodads are costly, but once you have thousands of dollars in passive income, they almost don't matter. By the same token, getting downsized or having kids, two things that set me back big time when I first played cashflow, are now no longer impediments. My focus has changed from paying off debts and building cashflow slowly, to worrying less about debt, and focusing more on what opportunities are available. The way to win -quickly- at cashflow is to get as many opportunities as possible, as quickly as possible. Sell off the winners when the market cards come up, and you quickly have enough cash to pay off your bank loans and start swinging bigger deals. At that point, my focus changes-- I no longer take as much risk and borrow as much money; I focus on buying lots of big deals that give me massive cashflow.

I hope this makes sense. It's kinda hard to describe, and much easier to see when playing the game. It goes back to my original points about "buying" children-- cashflow taught me to take scary things (added costs of kids and doodads), and offer to subsidize them for other players in exchange for getting first right of refusal when they landed on "opportunity". By doing this I helped out another player, and got more frequent access to big deals. A win-win for both parties.

Cashflow is a brilliant game. It has taught me more about how money and leverage works than anything else I've ever done. And more important, it has shown me that by working *with* other people on win-win deals, we both get out of the rat race faster.

That's huge.

-Russ H.

* Actually, I did! I wrote this in July of 2003-- just 2 months before we got our first $1,000,000+ loan. We now have over $3,000,000 in loans, and $600K more in reserve (HELOCs).

 

[Allthingznew]

Wow, just wow. I have to come back when I can actually READ it all! Russ, you're awesome!

 

[Sid23]

So Russ, when is the next San Francisco get together?

 

[bflbob]

Why I Play Cashflow

Part of the fun of cashflow is playing fast and loose, and trying new things to see if they work.

I've played with Russ.
Without a doubt the best game-playing experience I've ever had.

He taught us for a bit, then worked out a win-win-win-win-win solution.
Everyone playing got out of the rat race all in the same turn.

 

[andviv]

When I created this post I was expecting a reply from Russ. But this is just too much good information at once. Thanks Russ for your strategies.

This one is how I see my financial life as well. When I play the game this way I can get out pretty quickly. Others that play with me just can't understand why. But I know I am doing it to validate how good my strategy is.

My focus has changed from paying off debts and building cashflow slowly, to worrying less about debt, and focusing more on what opportunities are available. The way to win -quickly- at cashflow is to get as many opportunities as possible, as quickly as possible. Sell off the winners when the market cards come up, and you quickly have enough cash to pay off your bank loans and start swinging bigger deals. At that point, my focus changes-- I no longer take as much risk and borrow as much money; I focus on buying lots of big deals that give me massive cashflow.

 

[GoldenEggs]

Wow, I don't have as much feedback as Russ does but here are some things I've seen to alter the game.

Each person takes an additional role. For example, you are an engineer but you want to start your own business. You get one paycheck and nothing else.

Or you are an airline pilot and you have bad credit so you can't borrow money. But you keep coming across great deals (pull 3 cards at a time when you land on a deal space).

Or a person cannot pull any deals at all.

Pull a doodad card on every turn.

One time I was playing 202 with another player and we kept getting out in 3 turns. Then another player joined us and we were never able to get out again! One thing I have noticed about myself is that I am so conservative in playing but it's not the way that my husband and I invest. I pick the small deals, I go for the stocks and want to pay down my debt. In real life, we're going for big deals. What a difference a team makes!

We play cash flow about once a month. In fact, we're hosting a game today.

 

[andviv]

Golden, I suggest you print this thread and pass it to the other players, so they think about these diff strategies for the next game. I think your game alters are great.

Anybody else has strategies?

 

[LazyPenguin]

Im going to go try SF style CF right now. sounds interesting since i usually get out of the RR in about 40 min. Im still a little confused about the "no income" thing. Do you set your income to "0" because you take out that much in loans to begin with?? or do you just start with the original rules amount of money (savings+monthly cashflow)

:thankyousign:

 

[Russ H]

No income means you never get a payday.

You start with zero dollars, and never collect any pay from your "job" (just expenses).

-Russ H.

 

[LazyPenguin]

All right . thank you Russ! Im going to try that next, that seems like a challenge.

 

[NerdSmasher]

What about Cashflow 202?

Strangely enough, I actually think 101 is harder, lol. Somehow, I can easily get to the fastlane quickly in 202, but 101 it is more challenging... perhaps it has something to do with the fact that I'm playing the e-game?

What do you guys think about CF 202? Easier? Harder? Different game altogether??

 

[Russ H]

We're talking about the board game, not the egames.

Big difference, since most of the advantages in the board games are not avail in the egames (massive leveraging, partnering, using your own real life income/expenses, doing "charity" and "angel" and "mentor" work, etc).

Playing the 202 board game is fun, and can be every bit as challenging. But it builds on the 101 game, and unless everyone you're playing with is an experienced 101 player, and has already played 202 a few times, it's usually better to stick with 101 (if you've never played before, just playing 101 for the first time is a bit of a head rush).

-Russ H.

 

[mglshark]

I played 101 / 202 to death many times. You can get out of the game within 10 - 20 mins. by a rules "cheat" (exploit?) I seen players do - pooling everything together so player 1 gets big deal - hits the rat race and turns over assets to player 2 who now gets out, etc. A mind bender when I first saw it, but defeats the teaching element of the game.

But better then that is some house rules that work well:

Paying 30% tax on all stock or real estate profits on sale unless player holds for 12 turns then 15% tax.

Real estate profits can go into separate pool to buy equal or up with no taxes (1031 exchange).

Player can opt out of salary "job" be self employed in same profession - roll one dice - 1 = pay half salary to bank 2 = received half pay 3 / 4 normal 5 = 1.5 x pay 6 = double pay.

Player can also give up job salary altogether, if he rolls an one or doubles for movement he can roll / move / play again one more time.

Fast track admittance - you must quit job, have net worth $1 million to move to fast track.

You can also reflect up or down tone of both stock & real estate market beginning of the game -

one die rolled on each market = 1 = down 2-3 = normal 4-5 = up 6 = Bubble!

Stock can change during the game by player rolling doubles or landing on start hex. Player then rolls one die as above to see if the market changes first before pulling cards or finishing turn.

RE only changes by same guidelines if player lands in space occupied by another player.

Down market - Stock prices reduce by 5 so $40 now is $35, stock options cards stay the same.

- RE down payment cut in half, cash flow double

Normal - same as regular game

Up Market - Stocks prices add $5 (except BK stock card stays at zero), stock option cards stay same

- RE down payment double, cash flow cut in half

Bubble! - same as "up market" but all asset cards (stock / RE / gold / bonds, / options, etc.) are put on the public action for all to bid for that card, to highest bidder, proceeds to the bank.

All doodads costs are double! (yep that backyard pool....)

Finally stock option cards can "roll out" when expiring, owning player (or he says no one another player may buy - mini auction with proceeds to the bank) can buy them again (at face value) but lose 1 less turn at holding them, i.e. 3 turn hold to expire nows drop to two, same player can buy again but drops to one turn holding to expire. Past one turn they expire and are return to the discard deck if not used.

We tried these variants and found the game to drive home how taxes / RE exchanges affects your game play choices while the market up / down tones affects where the wealth is hiding.

Anyway, enjoy!

Marc

 

[lucas]

101 is trivial to beat with the stock cards.... here's the infamous strategy I use that has had many house rules made to prevent me from using it any longer =) hehehe

1. Wait until you get a $1 or $5 stock card

2. Borrow $1 billion from the bank. (Yes, this is allowed per the normal rules)

3. Spend $100 million on stock, netting you 100 million shares (or 20 million if you drew the $5 card instead of the $1 card)

4. You now have $900 million in capital left.... this you keep.

5. You can now afford to pay the interest on the $1 billion outstanding bank loan (10%, or $100 million) up to nine times. This means you can survive for nine paychecks.

6. Now you simply play the game normally, as long as your stock card comes up for higher than $5 within 9 paydays, you sell all your shares, pay off the monstrous make loan and make a huge profit, which allows you to buy any big deal in the game, pay off all your debts in their entirety, etc.

The more players you are playing with, the higher probability of this strategy working, because there are more chances for the stock card to come up. I have found that even in a 3 player game, as long as you only do it with a $1 stock card or $5 stock card, the chances are pretty high that that stock will come up again (and for a higher amount) before you can no longer pay interest on the loan you took out and you go bankrupt.

Now all my friends that play with me always make me do one of two house rules:

Either (1) You cannot borrow from the bank to buy stock, when a stock card comes up you cannot take out a loan of any kind,

or (2) Don't play with stock cards at all, simply remove them from the game before playing.

I actually prefer #2 because it makes the game much more challenging... the stock market in 101 is so simplistic compared to 202 that it's wayyyy too easy to make money it (IMHO anyway).

But I still love doing that $1 billion loan in front of somebody who has never seen it before =) They inevitably ask, "Can you really do that?? Is that allowed?????"

:smx2:

 

[mglshark]

Lucas - I got to say that is clever, I never saw that before! Borrow more than what you need using the surplus to cash flow until the big payoff! I believe this is done in big RE projects all the time! Of course if the market goes south you can be wipe out, but as Trump says "when the bank is on the hook for a multi-million dollar loan, it is their problem not yours", to paraphrase!

Maybe a rule to limit bank money for stock buys to 50% margin of your existing stock portfolio, however you can still make side deals with other players. 101 was more libel then 202 rules on stock deals.

Marc

 

[Russ H]

Guys, this is a game that helps you model what you might want to do in real life.

You can try out all kinds of different strategies, to see how they play out.

That's what we did. And after playing over and over and over, we figured out how to get out of the rat race, more than 95% of the time, using the same strategy.

The KEY:

The strategy we used was one that is available in real life.

lucas, how has borrowing a billion $$ and waiting for the $5 stock changed the way you live your life?

Has it changed the approach you are taking in working towards financial freedom?

The key of cashflow, at least for us, was not to win.

It was to figure out strategies that could be used in real life, to consistently win, over and over again.

You can get out of the game within 10 - 20 mins. by a rules "cheat" (exploit?) I seen players do - pooling everything together so player 1 gets big deal - hits the rat race and turns over assets to player 2 who now gets out, etc. A mind bender when I first saw it, but defeats the teaching element of the game.

Agreed. Unless you are willing to actually do this by partnering in real life.

I really liked some of your other ideas, mgl. Lots of real-world changes to make the game more like reality.

Please do consider the $1 stock as BK, and removing several cards out of play for each game. This eliminates the "borrow a billion and retire" strategy.

(Although if anyone here has figured out how to, for their first investment, borrow a billion $$ in real life and invest in a stock that increases by 1000%, by all means, LET US KNOW! )

-Russ H.

 

[lucas]

lucas, how has borrowing a billion $$ and waiting for the $5 stock changed the way you live your life?

Has it changed the approach you are taking in working towards financial freedom?

Absolutely! It has reinforced what I already knew and brought it to a new level -- that the most effective strategies are ones you would never even think of unless you get used to thinking "outside the box". Also, that the fastest way to get rich is by using other people's money, not your own. Also, that increased risk usually means increased reward.

It has made me ask myself what my own personal risk tolerance is, why that is, and if maybe I should be convincing myself to be less risk averse and if I could handle that kind of pressure.

I don't know for sure yet but I am anxious to get there and find out!